Chip Sales Agreement Between Nvidia and AMD
Chip manufacturers Nvidia and AMD have reportedly reached an agreement with the US government to remit 15% of their revenues from chip sales in China. This deal was part of negotiations aimed at obtaining export licenses from the Trump administration.
According to sources close to the matter, including US officials, Nvidia will share 15% of its revenue from sales of H20 chips in China, while AMD will do the same with its MI308 chips. The administration has not clarified how these funds will be utilized.
This agreement marks a significant shift as it is the first instance where companies have agreed to share a portion of their earnings to secure an export license. This aligns with President Trump’s tendency to encourage businesses to invest domestically to create jobs and income in the United States, thus potentially circumventing tariffs.
The arrangement follows a backdrop of tensions regarding Nvidia’s H20 chips, which were specifically developed for the Chinese market after President Biden implemented stringent export controls on more advanced AI chips. In April, the Trump administration had initially proposed a ban on H20 exports to China, but reversed that decision in June after Nvidia’s CEO Jensen Huang met with President Trump.
During a visit to Beijing, Huang lauded the progress made by Chinese companies in the technology sector. In a discussion at the International Supply Chain Expo, he highlighted the AI research of the Chinese company Deepseek, describing it as “very well written” and showcasing “high quality science and engineering.” He also noted that Chinese AI researchers are among the most prolific in terms of published papers in the field.
However, some security experts have raised alarms about the implications of selling the H20 chip to China, arguing that it could bolster the Chinese military and weaken US capabilities in AI. Nvidia has countered these assertions, labeling them as “misplaced” and asserting that the H20 chip cannot be used for military applications.
